Swiss trader Gunvor has seen profits fall in the first half of this year, and has more than doubled its provision for an expected fine in its ongoing bribery case.
The global energy trader has increased the amount set aside to cover the fine to $450 million up from $200 million set aside in 2022.
A former Gunvor employee pled guilty in 2021 to a scheme to bribe Ecuadorian government officials in a bid to win business.
Gunvor also saw its first-half net profit slip to $803 million from $841 million for last year’s corresponding period with the firm citing lower price volatility in gas and oil markets.
In 1977, the U.S. Congress enacted the Foreign Corrupt Practices Act (FCPA) following discovery of widespread corruption in the wake of the Watergate political scandal. FCPA prohibits individuals and businesses from bribing foreign officials in order to obtain or retain business. FCPA has been amended several times, and has earned a reputation as one of the most effective transnational anti-corruption laws in the world.
FCPA has become the bane of the oil and gas industry.
Whereas FCPA violations have been uncovered hundreds of times across diverse industries, the global oil and gas industry has developed an enviable reputation for foreign bribery and corruption, and seen more FCPA enforcement actions than any other industry. In 2010, the SEC launched bribery-related investigations into the oil and gas industry and revealed an elaborate scheme through which seven companies were paying millions of dollars in bribes to foreign officials.
To wit, Panalpina Inc., a U.S. subsidiary of the global freight forwarding company Panalpina World Transport, was found guilty of paying millions in bribes between 2002 and 2007 to foreign government officials on behalf of oil industry customers.
At least six major oil companies and their subsidiaries were implicated: Shell Plc (NYSE:SHEL), Pride International Inc., Tidewater Inc.(NYSE:TDW), Transocean Ltd (NYSE:RIG)., GlobalSantaFe Corp, and Noble Corp. Plc.(NYSE:NE).
That said, the vast majority of violations committed by Big Oil that result in fines are environmental in nature. Shell has received fines more frequently than most other oil and gas companies: of the company’s 621 fines to-date, 485 concern environmental violations.
ADVERTISEMENT
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com:
- Next Hurricane Could Shut-In 40% Of Gulf Of Mexico Production
- Tanker Suspected Of Carrying Iranian Oil Offloads Near Texas
- Money Manager Sees $120 Oil Surprising Bears
